Ballmer: Combined Microsoft-Yahoo Needed to Battle Google

A day after Google issued a blogosphere smack down in which it categorized Microsoft's bid for Yahoo as troubling and possibly illegal, Microsoft stressed a combined Microsoft-Yahoo would serve as much needed competition against Google.

A day after Google issued a blogosphere smack down in which it categorized Microsoft's bid for Yahoo as troubling and possibly illegal, Microsoft stressed a combined Microsoft-Yahoo would serve as much needed competition against Google.

"Google's got a dominant position. They've got about 75 percent of paid search worldwide," Ballmer said during a webcasted presentation to financial analysts. "The combination of Microsoft and Yahoo actually makes a more competitive marketplace. Any alternative scenario doesn't enhance competition. That's certainly the message we'll convey to regulators."

David Drummond, Google's senior vice president for corporate development and chief legal officer, suggested in a Sunday blog post that Microsoft might "attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC."

Despite the controversy, Ballmer was confident the deal would go through. "We would expect to buy Yahoo at this stage. It's certainly in our best interest," he said.

Ballmer highlighted several areas on which a combined Microsoft-Yahoo would have to focus, including increased research and development (R&D) capacity.

"We are going to have to innovate like crazy to get the position that we want in this market" and compete with Google, he said. "We continue to hire people, transfer people, but bringing together Microsoft and Yahoo will allow us, because of fantastic engineering talent [from Yahoo and Microsoft], more capacity, more quickly."

About the Author

Chloe Albanesius has been with PCMag.com since April 2007, most recently as Executive Editor for News and Features. Prior to that, she worked for a year covering financial IT on Wall Street for Incisive Media. From 2002 to 2005, Chloe covered technology policy for The National Journal's Technology Daily in Washington, DC. She has held internships a... See Full Bio

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